Suburban Calgary businesses brace for business tax 'shock and awe'

A staggering $4 billion drop in the assessed value of downtown offices has caused a redistribution of non-residential property taxes, Calgary’s acting city assessor said Thursday.

The shift means businesses outside the core will be slapped with significant tax increases to make up for the lower property assessments downtown where skyscrapers sit empty and vacancy rates have reached historic highs.

“It’s going to be shock and awe when business owners open their assessment notices,” said Richard Truscott, vice-president for Alberta and B.C. at the Canadian Federation of Independent Business.

“This is another hit to small business in Calgary. This is going to be a very difficult thing for many businesses to endure. Some will decide this is the final straw.”

Harvey Fairfield, acting city assessor, said while the overall value of non-residential properties dropped six per cent over last year, growing vacancies mean downtown office properties and businesses have experienced a greater than average decrease.

But taxes still need to be collected and Fairfield said the market shift means “other property type groups that aren’t experiencing the same decrease as the downtown office category,” will be on the hook to pick up the slack.

Samer Halasa, who co-owns an 1,800-square-foot coffee shop in a Royal Oak strip mall, said between the October increase to minimum wage, the economic downturn, the after-holiday lull and even the recent cold snap, operating a cafe is already difficult, without factoring in a potential tax increase.

“It’s a struggle as is and anything added on top is going to make it harder,” said Halasa.

Since opening the doors of Cafe Fresco in September 2015, Halasa has already seen a convenience store in the same suburban strip mall close and said it’s obvious there’s a recession in Calgary.

“For us, every dollar counts. Even a five per cent increase, we’re going to feel it,” he said.

“At the end of the day, we knew (running a business) was going to be hard. If it was easy, everyone would be doing it. You keep your head up and you do the best you can.”

Adam Legge, president and CEO of the Calgary Chamber of Commerce, said the property tax redistribution will significantly impact smaller and mid-sized companies.

“I think it will result in many unfortunate decision, like layoffs, like lack of investment or companies experiencing a loss, owners and investors dipping into personal savings, those sorts of things,” Legge said.

“There really is very little that can be done. What’s important is that the city has stepped up with some modest amounts of money.”

But Truscott said the $15 million in to-be-determined business relief isn’t enough to provide meaningful help for businesses that need it.

“To quote the movie Jaws, I think we’re going to need a bigger boat,” he said.

“It’s a nice gesture. It’s a welcome move. But it’s clearly not enough.”

If you’re a Calgary business owner concerned about the city’s 2017 property assessments and impact it may have on your enterprise please contact civic affairs reporter Annalise Klingbeil by filling out the form below. Your information will remain confidential but you may be contacted for an interview.

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